Dubai’s booming real estate market continues to attract global attention, with the emirate on track for another record-breaking year of property sales.
However, this surge in demand has raised concerns about inflation. Hussain Sajwani, chairman of real estate giant Damac, voiced his worries about rising costs in the city, which is drawing more residents and businesses, potentially making Dubai one of the most expensive places to live.
“Today, getting a seat in a school is difficult, and businesses are raising prices. Inflation is going to be high,” Sajwani said in a recent interview with CNBC.
The influx of talented individuals and families into Dubai has intensified demand for essential services, pushing up prices across the board, not just in real estate.
Why inflation in Dubai is hard to control
Sajwani’s concern goes beyond property prices.
He urged the government to address the broader economic impact of Dubai’s growing population and wealth, including inflation in everyday goods and services.
However, controlling inflation might be challenging given the influx of new residents, attracted by Dubai’s tax-friendly policies and luxurious lifestyle.
In July alone, property sales in Dubai soared 31.6% year-over-year to reach $13.5 billion, according to local brokerage Elite Merit Real Estate.
Over the year’s first half, Dubai recorded more than 43,000 property transactions, selling around 80% of the inventory launched since 2022.
The luxury segment, in particular, is booming, with the city selling 436 ultra-luxury homes in the past year compared to just 23 in 2019.
This surge is largely driven by wealthy individuals seeking to relocate to a tax-friendly, business-friendly environment.
Hussain Sajwani expects rise in property demand
Despite concerns about inflation, Sajwani remains optimistic about the future of Dubai’s real estate market.
He noted that Dubai is attracting not just the wealthy, but people from all walks of life, from taxi drivers to business executives.
“Everyone wants to come to Dubai,” he said, emphasizing that the city’s appeal has broadened significantly.
Sajwani credits this demand to Dubai’s response during the COVID-19 pandemic when it introduced new visas for tourists, entrepreneurs, and remote workers.
These policies helped position Dubai as a global hub, attracting talent and businesses alike.
“Dubai today is a global city, attracting a lot of talent and businesses. We’re going to continue to grow,” Sajwani added.
Sajwani also expressed confidence in the long-term stability of Dubai’s real estate market. Unlike the boom-and-bust cycle it experienced during the global financial crisis, Dubai’s property market is now regulated more strictly, ensuring both developers and buyers are held to higher standards.
This regulatory environment, he believes, will help protect the market from future downturns.
While Sajwani is optimistic about Dubai’s continued growth and prosperity, his warnings about inflation highlight a key challenge for the city as it continues to cement its status as a global luxury hub.
Managing this growth while keeping living costs in check will be crucial for the long-term sustainability of the emirate’s economy.
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